On appeal, defendants assign error to both of the trial court's summary
judgment rulings. Because the determination of both motions involves the same legal
issue, we determine which of the parties was or were entitled to judgment as a matter of
law. ORCP 47 C (1997); see Jones v. General Motors Corp., 325 Or 404, 939 P2d 608
(1997).

The promissory note is subject to the provisions of Article 3 of the Uniform
Commercial Code (UCC), ORS chapter 73. ORS 73.0110(4) provides, in part:

"If an instrument is payable to two or more persons alternatively, it is
payable to any of them and may be negotiated, discharged or enforced by
any or all of them in possession of the instrument. If an instrument is
payable to two or more persons not alternatively, it is payable to all of them
and may be negotiated, discharged or enforced only by all of them."
(Emphasis added.)

Defendants contend that the language above requires a payee to obtain the consent of the
others in order to enforce an instrument payable jointly to all. Because they did not
consent to enforce the note, defendants argue that plaintiff may not proceed unilaterally to
enforce the note and foreclose the trust deed securing it. Plaintiff replies that the statute
does not expressly or implicitly require that all joint payees consent to enforcement of an
instrument but, rather, merely requires each to join as a party to an enforcement action.
Plaintiff argues that, by operation of ORCP 29 A, defendants were parties to enforcement
of the note within the meaning of ORS 73.0110(4).

The parties' disagreement presents, in the first instance, a problem of
statutory construction involving ORS 73.0110(4). That problem also implicates ORCP 29
A, a separate enactment whose meaning is not in dispute. Specifically, we must
determine whether the portion of ORS 73.0110(4), providing that "an instrument * * *
payable to [joint payees] may be negotiated, discharged or enforced only by all of them,"
precludes the joinder of recalcitrant joint payees as defendants, if necessary, under ORCP
29 A, which provides that "[i]f a person should join as a plaintiff but refuses to do so,
such person shall be made a defendant."

In construing ORS 73.0110(4), our task is to discern the intent of the
legislature. PGE v. Bureau of Labor and Industries, 317 Or 606, 610, 859 P2d 1143
(1993); ORS 174.020. Initially, we consider the text and context of the statute, and we
"utilize[ ] rules of construction that bear directly on the interpretation of the statutory
provision in context." Id.

The text of ORS 73.0110(4) is our beginning point. Plaintiff correctly
observes that the statute does not, in explicit terms, state that all joint payees under an
instrument must consent to join as plaintiffs in an enforcement action. However, the
requirement that an instrument may be enforced only by all joint payees arguably
suggests, as defendants assert, that affirmative conduct is required of all of them. If that
were the case, defendants' refusal to join in the action as plaintiffs would effectively
preclude enforcement of the note and trust deed, despite Medford Highlands' adjudicated
default. Defendants admonish us not to dwell on the apparent illogic of such a result.
According to defendants, we must simply apply the statute as it reads, and the problem of
enforcement in these circumstances is one best left for the legislature to remedy.
Defendants overlook the fact that we must examine the context of the statute in order to
complete the first level of analysis. Id. at 611.

In interpreting the UCC, we consider as relevant decisions of courts in other
jurisdictions construing the same provision. Schultz v. Bank of the West, 325 Or 81, 87,
934 P2d 421 (1997). As the Supreme Court explained in Security Bank v. Chiapuzio, 304
Or 438, 747 P2d 335 (1987),

"[t]he [UCC] was adopted in Oregon with little debate or discussion of the
legislative intent. It is possible, however, to discern the basic intent of the
legislature in adopting the UCC. The UCC was proposed for Oregon so
that Oregon could obtain the same advantages that other states had gained
from the adoption of a uniform and comprehensive set of commercial
statutes. * * * In adopting the UCC, the legislature took note of the official
comments provided by the National Conference of Commissioners on
Uniform State Laws. * * *

"The legislative intent behind the UCC can therefore be derived from
the language of the statute itself and the language of the comments. In
addition, the legislative intent to make the UCC a uniform code makes
relevant the decisions of other courts that have examined these questions
and the discussions of the questions by scholars in the field, especially those
scholars who participated in drafting the UCC." Id. at 445 n 6.

The relevant language of ORS 73.0110(4) and its predecessor statute has not been
amended since Oregon adopted the UCC in 1961. Or Laws 1961, ch 726, § 73.1160. It is
identical to UCC § 3-110(4). Thus, appellate decisions from other jurisdictions
construing those jurisdictions' identical versions of UCC § 3-110(4) are relevant to our
construction of ORS 73.0110(4).

We find those decisions persuasive for two reasons. First, the purposes of
UCC § 3-110(4), and of the UCC generally, are at odds with the meaning advocated by
defendants. In Vance, the Arizona Supreme Court explained:

"The reasons for [UCC § 3-110(4)] are apparent. A note made out to more
than one party should not subject the maker to multiple lawsuits by the
various payees. * * * It does not follow, however, that one uncooperative
payee can prevent a co-payee from suing on the note. If one payee could
prevent, by inaction, the other payee from collecting from the maker what is
due on the note, collusion and fraud would be encouraged to the damage of
the legitimate interest of the other payee." 601 P2d at 607.

It is not necessary, in order to protect a payor from the risk of multiple lawsuits by joint
payees, to insulate the payor from liability altogether, merely because the payees are
unable to agree upon the appropriate recourse following default on the instrument.
Defendants' interpretation of the statute would leave plaintiff without a remedy for such
default. That result would offend ORS 71.1060(1), which provides that "[t]he remedies
provided by the [UCC] shall be liberally administered to the end that the aggrieved party
may be put in as good a position as if the other party had fully performed * * *."

"Plaintiffs are not entitled to maintain this action unless Defendants
Sauls agree. Defendants Sauls do not agree to maintain this action or to
join in the foreclosure due to the acts and omissions of Plaintiffs in the
transactions leading to this litigation."

In their response to plaintiff's motion, defendants argued:

"Permitting foreclosure will lead to Plaintiff and Defendants becoming co-tenants of the property. Defendants do not wish to be co-tenants with
Plaintiff because he has unclean hands in the transactions leading up to this
litigation (See Defendants' answer in Paragraph 19). 'Unclean hands' is a
defense to a foreclosure action. SeeBaxter v. Redevco, Inc., 279 Or 117[,
566 P2d 501] (1977); U.S. Nat. Bank of Oregon v. Smith, 49 Or App 289[,
619 P2d 921] (1980) aff'd as modified 292 Or 123 (1981)."

According to defendants, plaintiff's failure to present evidence negating that
defense precluded summary judgment in his favor. (7) Defendants are mistaken. The theory
that defendants propounded in their answer and memorandum opposing summary
judgment was not, in reality, an unclean hands defense to the relief plaintiff sought:
enforcement of the note and trust deed. Instead, it was raised as a defense to their
compelled joinder under ORCP 29 A. Defendants' theory was based on the premise that
plaintiff was "not entitled to maintain this action unless defendants Sauls agree." As we
have already determined, that premise is incorrect. (8) ORCP 29 A permitted defendants'
joinder as defendants, despite their objection, because they are necessary parties to the
enforcement of the note and trust deed. However, they are defendants by designation
only, to ensure that Medford Highlands--the maker and the grantor--is not exposed to the
risk of multiple enforcement actions.

Plaintiff did not seek to enforce the note and trust deed against defendants,
and Medford Highlands has not appealed from the judgment enforcing the note and
foreclosing the trust deed against it. The doctrine of unclean hands, when raised in an
action to enforce an instrument, is available to a debtor or a party claiming under a debtor.
See,e.g., Community Bank v. Jones, 278 Or 647, 566 P2d 470 (1977). Defendants have
cited no authority for the proposition that an unclean hands defense to the enforcement of
Medford Highlands's obligations existed in defendants' favor, and we are aware of none.
Assuming that plaintiff had engaged in inequitable conduct in his dealings with
defendants, that conduct did not preclude the enforcement of the note and trust deed
against Medford Highlands and those claiming under it. See General Development Corp.
v. Binstein, 743 F Supp 1115, 1134 (DNJ 1990) (unclean hands doctrine applies only
where unconscionable conduct of party seeking relief has immediate and necessary
relationship to the equity that party seeks in respect to the matter in litigation). Therefore,
defendants' affirmative defense was not a bar to summary judgment.

Affirmed.

1. Plaintiff brought the action against Medford Highlands, the Sauls, Orbis
Geographics, and ALC Financial Corp., a junior lienor. Only the Sauls appeal.
Accordingly, we refer only to the Sauls as "defendants."

"A person who is subject to service of process shall be joined as a
party in the action if (1) in that person's absence complete relief cannot be
accorded among those already parties, or (2) that person claims an interest
relating to the subject of the action and is so situated that the disposition in
that person's absence may (a) as a practical matter impair or impede the
person's ability to protect that interest or (b) leave any of the persons
already parties subject to a substantial risk of incurring double, multiple, or
otherwise inconsistent obligations by reason of their claimed interest. If
such person has not been so joined, the court shall order that such person be
made a party. If a person should join as a plaintiff but refuses to do so, such
person shall be made a defendant, the reason being stated in the complaint."

3. Rule 19(a) of the Arizona Rules of Civil Procedure provides, in part:

"A person who is subject to service of process and whose joinder
will not deprive the court of jurisdiction over the subject matter of the
action shall be joined as a party in the action if (1) in his absence complete
relief cannot be accorded among those already parties * * *. If he has not
been so joined, the court shall order that he be made a party. If he should
join as a plaintiff but refuses to do so, he may be made a defendant, or, in a
proper case, an involuntary plaintiff." (Emphasis added.)

"If any one who is a necessary plaintiff, counterclaimant or
third-party plaintiff declines to join, he or she may be made a defendant,
cross-defendant or third-party defendant, as the case may be, the reason
therefor being stated in the complaint, counterclaim or third-party
complaint." (Emphasis added.)

5. Commercial law commentators also have reached the same conclusion. See
William D. Hawkland & Larry Lawrence, 6 Uniform Commercial Code Series § 3-110(4)
(April 1999) ("A joint payee may compel the remaining joint payees to join in the action
to enforce the instrument."); Ronald A. Anderson, 5A Anderson on the Uniform
Commercial Code § 3-116 (3d ed 1994) ("The fact that [UCC § 3-110(4)] requires the
joint indorsement of joint payees does not alter prior equitable jurisdiction by which one
payee can compel the other to join in taking necessary action to collect the instrument.").

6. Defendants argue that ORS 73.0110(4) states a rule of substantive law,
which would trump ORCP 29 A, a rule that defendants characterize as one of mere
procedure. The distinction between substantive laws and procedural rules is relevant, for
example, in cases where a court in the forum state must apply the controlling substantive
law of another state. SeeEquitable Life Assururance v. McKay, 306 Or 493, 497, 760
P2d 871 (1988) (discussing the distinction in answering a certified question from the
Ninth Circuit Court of Appeals). We do not find the distinction helpful in resolving the
problem at hand.

7. None of the parties submitted any evidence in connection with plaintiff's
summary judgment motion that addressed defendants' affirmative defense. Defendants
argue that plaintiff, the moving party on that motion, had the burden of production "even
as to those issues upon which the opposing party would have the trial burden." Jones v.
General Motors Corp., 325 Or 404, 420, 939 P2d 608 (1997). Plaintiff's motion for
summary judgment was filed before the effective date of the 1999 amendment to ORCP
47 C, which provided, in part, that "[t]he adverse party has the burden of producing
evidence on any issue raised in the motion as to which the adverse party would have the
burden of persuasion at trial." However, the 1999 amendment became effective before
the summary judgment record was complete and before the trial court ruled on the
motion. In light of our disposition of this case, we need not decide which version of
ORCP 47 C governed the burden of production on plaintiff's motion.